Azernews.Az

By Bloomberg

Forget about Greece because it doesn’t have the potential to hurt returns in a number of key markets.

That’s the message from Coeli Asset Management, a Swedish fund manager that oversees more than $1 billion in assets.

Andreas Brock, who manages Coeli’s Global Selektiv fund, and Christian Voboril, who oversees the Coeli Select Sverige fund, said in a July 10 interview in Stockholm that Greece’s meltdown shouldn’t guide investment choices.

“It’s no surprise that Greece has problems,” Voboril said. “You should just forget about it. To me, it makes absolutely no difference.”

As investors fret about Greece and its grim prospects even after striking a deal with creditors, Brock is instead spending the summer researching Brazil. Though the real has halved in value in the last four years and Brazil’s economy is expected to contract in 2015, banks and transport companies could be attractive once the worst is over, Brock said.

“I’m looking at what companies I want to own once we reach the bottom in Brazil,” he said. “I’m not saying we’re there yet, but we’ll probably reach the bottom some time between now and 24 months from now.”

His fund has returned 16 percent so far this year, beating the 9 percent in the MSCI All Country World Daily Net Total Return Index.

With a broad mandate to invest in any company anywhere in the world, the fund holds shares in 25 to 35 firms from Israel to China. Brock has only recently entered Asia’s largest economy, where he sees prospects of a turnaround led by the property market as lower interest rates support housing.

China Turnaround?

“I’ll wait to put more gunpowder in until we know it’ll turn around -- but it looks like it is doing that,” Brock said.

For European and U.S. exporters with a large exposure to China, the picture is a lot bleaker, according to Brock.

“I think the market is forgetting that in the latest slump in China in 2008, local companies changed preferences and started buying more locally,” he said. “I think the same thing will happen in this slowdown, that you will have an even more pronounced shift from western companies to local.”

In Europe, Brock pointed to ABB Ltd. as a company that would suffer if Chinese firms start buying more goods from domestic producers. Companies exposed to the oil, gas and mining industries are also set to post weak second-quarter results, he said.

Elsewhere in Europe, assets such as Italy’s Brembo SpA, Germany’s Kuka AG and Sweden’s Trelleborg AB should fare better as the European car industry provides support, Brock said. SKF AB, a traditional industry bellwether, is a “tough call,” with its exposure to China balanced by an appealing price level, he said.

Swedish Banks

Voboril’s fund, where a 17 percent return so far this year has outperformed the 14 percent for the benchmark OMXS30 Total Return Index, invests in as many as 15 Swedish companies. His latest bets have focused on industrials that tend to do well early in an economic recovery, as well as consumer-goods companies set to benefit from more optimistic households. His most recent move was to increase a stake in online electronics retailer Dustin AB.

Voboril’s next step could be to buy a stake in one of the major Swedish banks, he said. “They are approaching more reasonable valuations.” SEB AB looks like the most attractive option, Voboril said.